While meditating during one of my recent flights over the
Florida/Georgia border I was challenged by the guy sitting next to me to think
about relationships with third party providers.
What is it that makes the relationship good, beneficial,
rewarding, and, of course, lucrative for both sides?
Keeping in mind all of the aspects of personalities,
attitudes, and corporate cultures as discussed in some of my previous posts, I
tried to focus on the business and operational aspects of this kind of a
relationship. So let’s explore some of the challenges and possible solutions of
working with third parties:
1.
Is it a one-time gig?
When you need something done
quickly that is not too technologically involved with your product, many times
it is best to go to a third-party vendor. In this case, the amount of coding
and their pricing are likely to be the most important items on the list. Get
references, see their past work, and go for it. In this scenario you get what
you pay for, and you are not concerned with a long-term relationship. If
something goes wrong, no biggie. There is no long-term strategy here, and the
vendor doesn't really care about your customers or market share.
2.
Is it a short-term (3-9
months) adventure?
Whenever you spend a longer amount
of time with a third party, employees are involved and it gets a bit tricky. When
it is a short-term project, the third-party provider is usually focused on the
task in hand and making a good impression for future “jobs.” The key is to make
sure the people doing your work indeed have the professional expertise to
perform the task.
A couple of our customers asked us recently about moving from one back-office system to another—Trams to Sabre Central Command. Our recommendation to them was to make sure the person (remember? It’s all about the people!) who will be transferring them to the new back-office system is someone who knows the travel industry. Otherwise, his/her knowledge of the product but lack of knowledge of the market and the customer’s needs has the potential to screw the whole thing up.
A couple of our customers asked us recently about moving from one back-office system to another—Trams to Sabre Central Command. Our recommendation to them was to make sure the person (remember? It’s all about the people!) who will be transferring them to the new back-office system is someone who knows the travel industry. Otherwise, his/her knowledge of the product but lack of knowledge of the market and the customer’s needs has the potential to screw the whole thing up.
3.
Is it a long term/ongoing
relationship?
The most important item in this
scenario is to determine the guidelines of the relationship. Is this third
party working behind the scenes? Will they engage with your customers? And if
so, will they represent you the way you want?
Another important aspect when getting into a long-term relationship is to be careful. Having been there myself, I highly recommend you do some background research on this company. Are they financially viable? Can they commit for the long term? How long have their employees been with them? The list of potential questions goes on. Unfortunately, and especially within the technology space, too many “cool” technologies and great people appear and often disappear before making real impact.
Another important aspect when getting into a long-term relationship is to be careful. Having been there myself, I highly recommend you do some background research on this company. Are they financially viable? Can they commit for the long term? How long have their employees been with them? The list of potential questions goes on. Unfortunately, and especially within the technology space, too many “cool” technologies and great people appear and often disappear before making real impact.
Recently, at Cornerstone, we
figured out a creative way to screen out potential third-party providers by
getting our customers involved in the vetting process. We took advantage of our
monthly online “Boarding Call”—where our customers join us for updates, case
studies, and more—and we polled the audience. Our customers were very receptive
to the idea that together (remember—it’s a partnership) we can let a potential third-party
provider present to us, and then we get some real feedback by polling the crowd
and analyzing the results. Questions like “do you think your customers will use
this service?” or “would you pay for this service?” help us tremendously with
initial filtering and at the same time bring our customers closer because they
are now an important part of the product roadmap. If the response is
overwhelming by the participants, we do the necessary due diligence in order to
make sure this will be a successful relationship.
So in short, if it’s a short-term,
one-time deal make some phone calls and go at it. Long-term relationship? Put
out the effort up front—it’s worth it.
When putting your customers first and yourself second, it’s no wonder they are called
a third- party provider!
